A loan of ₹50,000 at 10% a year is repaid in 2 equal yearly instalments by the reducing-balance method. To the nearest rupee, what is each instalment? (Take $(1.1)^{2} = 1.21$ .)

₹25,000Correct answerYour answer₹28,810Correct answerYour answer₹30,000Correct answerYour answer₹30,250Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

Worth noting

₹30,000 charges a flat ₹5,000 of interest each year, but in the second year only about half the loan is still owed.

Ten questions from EMI, CAGR & Depreciation, at your own pace.

Ten questions from EMI, CAGR & Depreciation, at your own pace.

A loan of ₹50,000 at 10% a year is repaid in 2 equal yearly instalments by the reducing-balance method. To the nearest rupee, what is each instalment? (Take (1.1)2=1.21(1.1)^{2} = 1.21(1.1)2=1.21.)